Correlation Between Oxford Square and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both Oxford Square and Sachem Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Oxford Square and Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Square Capital and Sachem Capital Corp, you can compare the effects of market volatilities on Oxford Square and Sachem Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Oxford Square with a short position of Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Square and Sachem Capital.
Diversification Opportunities for Oxford Square and Sachem Capital
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oxford and Sachem is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Square Capital and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp and Oxford Square is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Oxford Square Capital are associated (or correlated) with Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of Oxford Square i.e., Oxford Square and Sachem Capital go up and down completely randomly.
Pair Corralation between Oxford Square and Sachem Capital
Assuming the 90 days horizon Oxford Square Capital is expected to generate 2.19 times more return on investment than Sachem Capital. However, Oxford Square is 2.19 times more volatile than Sachem Capital Corp. It trades about 0.16 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about 0.05 per unit of risk. If you would invest 2,455 in Oxford Square Capital on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Oxford Square Capital or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Square Capital vs. Sachem Capital Corp
Performance |
| Timeline |
| Oxford Square Capital |
| Sachem Capital Corp |
Oxford Square and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Square and Sachem Capital
The main advantage of trading using opposite Oxford Square and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Square position performs unexpectedly, Sachem Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sachem Capital will offset losses from the drop in Sachem Capital's long position.The idea behind Oxford Square Capital and Sachem Capital Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sachem Capital vs. Sachem Capital Corp | Sachem Capital vs. Eagle Point Credit | Sachem Capital vs. B Riley Financial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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